Temasek, Singapore’s state investment firm, often moves in mysterious ways – not all of them lucrative, although the low-key sovereign wealth fund (which prefers being called an “investment agency”) has made enough shrewd moves over the years to maintain an enviably large war-chest of about $121bn- not least its move in November to sell its first ever tranche of 30-year bonds.
In its last annual report, in September, Temasek said it had an annual return of 16 per cent since its inception in 1974, down from the 18 per cent it reported August 2008 but still not a bad performance considering the investment environment.
Now, Temasek is setting up a wholly-owned multibillion dollar investment company to invest in assets from stocks to bonds.
In a brief statement by a spokesman it said:
“Temasek has recently set up Seatown Holdings as a wholly-owned global investment company. We have a small core team seconded from Temasek, and are still in the process of building up the Seatown team”.
Living up to its reputation for minimal information, Temasek added only that Charles Ong, senior managing director and chief strategist for Temasek – and a former investment banker at Deutsche Bank and Lazard Freres – would be chief executive of the new company.
Bloomberg, citing people familiar with Temasek’s plans, added that Nasser Ahmad, co-founder of New York-based DiMaio Ahmad Capital, a hedge-fund firm specialising in credit products, would be co-CEO of the new company.
Temask didn’t put a figure on it but the Wall Street Journal reports that Seatown could have an investment capital of around US$3bn to invest in emerging markets with a focus on Asia.
The funds for the new company will partly come from the money that Temasek raised from its recently increased US$10bn bond programme, having already raised close to US$5bn through bond issuance since 2005, the Journal added.
As Bloomberg noted on Wednesday, Temasek has transformed from a passive holder of stakes in government-controlled companies to an investor with more than two-thirds of its underlying assets abroad.
In a further metamorphosis, Temasek is also considering eventually inviting Singaporeans to co-invest with the new company in emerging markets. That follows a speech in July last year by Ho Ching, Temasek’s CEO and wife of Singapore’s prime minister, who first floated the idea of Temasek inviting public participation in its investment projects.
Temasek, she said, would want only long-term investors if the proposal went ahead. It would first seek “sophisticated co-investors” and test the model over “one market cycle during the next five to eight years” before deciding whether to invite retail investors “in perhaps eight to 10 years’ time”.